can somebody explain why gas prices didn’t go down (very much) last week when oil was under $100 a barrel? If oil was at it’s lowest price since March, then why didn’t we see gas prices that were equivalent to that time period? Call me naive, but I’m not too conspiracy oriented, so I’m hoping it’s more than “greedy oil companies”.

@jojo319: Couple things. One is that it’s still the refineries that are delivering less gas than is demanded (compared to 5 years ago, say). Blame it on not enough refineries being built, too many states wanting their own gas mix, or bofum.

The other is that gas stations, despite the raise in prices, haven’t been making money lately. While that seems illogical, think about running a gas station in an environment where prices are increasing. You buy gas to make a small profit / gallon at $3 / gallon, and then when it runs out you have to buy new reserves at $3.10 / gallon which completely eats your profit. They are either taking some profits back now that the prices are falling a bit, or they are worried that oil prices will go back up again (like today) and they’ll be caught without any margin again.

@jojo319: Another reason, in addition to Counterpoint’s answer, is that this price of oil is not reflected in the gas that the station has now. The gas station bought its fuel using the oil price that was in effect one or two months ago (when it was around 130-140), so it would probably take a month for gas prices to go down, assuming oil doesnt spike back up quickly and continuously like today.

@LastVigilante: Markets move in mysterious ways, often driven by emotion. But the world sees that the Fed is going to just print up more money to cover the cost of the bailouts, so they believe that the dollar doesn’t have as much purchasing power. Anything that is sold in dollars will cost more.

Today is the last day for trading the October Futures contract, so a lot of traders who were hoping for a better price that never came were forced to buy today, and people who had short positions were forced to cover them. Both of these tend to drive the price up. So a rise at this point is expected. The November contract increased just $6.62 today, which while a substantial sum, doesn’t come close the gain for the October futures contracts.

@spinfire: But but but the government told me short selling drives the price down! You say short selling can actually cause markets to jump up and add liquidity to the market, both very needed in the current market. Lies I say. Ban short selling and speculation forever. In fact do away with all selling. That means the market can only go up right? Time to make me head of the SEC, I just solved our economic crises.